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Tuesday, September 4, 2012

Peak Oil - Part 1: What and When is Peak Oil?

It's one of those phrases that instills a spark of
dread in all those who know what itPeak Oil.It is the beginning of
the end to a resource, to cheap energy, and to a way of life.It is one of those problems, like so many
others, that we know about but that so many choose to ignore, as if that will
make it go away.So exactly what is peak
oil?

The first time the world heard the term peak oil
it came from scientist M. King Hubbert, when he first introduced his oil
production model, now called the Hubbert Peak Theory.This theory takes data from discovery rates,
production rates, and cumulative production and putsthem together to create a picture of how much
of a nonrenewable resource is available.

So in a graph what you see is two different
curves that go up and go down.The first
curve represents discoveries.How much
new oil are we finding?When that curve
starts to drop then the second curve inevitably will follow.This curve is the rise and then decline of
oil production.Basically what this means
is that no new resources are found.When
there is nowhere new to drill for oil, we eventually start using up the oil in
already discovered places, until we run out.

Hubbert predicted that peak oil production in the
United States would happen around 1965-1970, and it has been determined that
this peak was achieved in the continental United States in the early 1970's at
10,200,000 barrels a day.Since this
point there has been a gradual decline in oil production.Hubbert then also predicted that the worldwide
peak would take place about a half century of his publication on the
theory.Hubbert published in 1956, which
makes a half century from then, to be right about now.

So lets take a look at what oil is looking like
right now.The first thing to consider
is demand.Without demand there is no
peak oil, because no one wants it to deplete the resource.Unfortunately that is not the case at
all.Our world runs on oil.Oil demand has grown on average 1.76% each
year from 1994 to 2006.World demand is
projected to increase 21% over 2007 levels by 2030 and a study published in the
Energy Policy journal predicated that demand would surpass supply by 2015.

In the meantime, out of the worlds largest 21 oil
fields, 9 are already in decline.In a
stuy of the largest 811 oilfields, conducted in 2007, the average rate of field
decline is 4.5% a year.Meanwhile the
IEA stated in November of 2008 that the decline in oil production was 6.7% and
that that would grow to 8.6% in 2030.

So what are we using all this oil for?Four things: transportation uses, residential
uses, commercial uses, and industrial uses, with transportation being the
largest consumer of oil.In 2006 the
amount of oil used for transportation in the United States made up 68.9% of
what the United States used, and like so many resources it is the United States
that is the largest consumer of petroleum.

However the United States and Europe are not the
only ones using oil anymore.Now
developing countries like China and India are using oil too, and at a faster
and faster rate.With over one sixth of
the world's population now being present in these two countries alone, you can
expect that the demand for oil is going to continue to go up, and as it does more
oil is going to be used.

So what about discovering new oil?That option, as lovely as it sounds, seems to
be off the table.The fact is that there
are no major oil finds left.Even the
gas companies like Shell and Exxon-Mobil are admitting that there is no more
easy gas left to find.

What about drilling in the arctic?A lot of people ask about that when they
first hear about peak oil.You get many
people saying we can just solve the problem here in the United States by
drilling in Arctic National Wildlife Refuce.The environmentalists,
the hippies, the tree huggers, or whatever else you like to call them, say that we
shouldn't drill there, because it will be bad for the environment.

Well, they're right.A lot of people don't like it, but it will
screw up the environment in that area of the world, and it would take a lot longer for it to get fixed than it will take to destroy it.If it meant an indefinitely supply of cheap
oil though, I would say go for it.However, unfortunately that is not the case.Above the arctic circle there is somewhere
from a pessimistic 30 days of oil, to a highly optimistic 3 years of oil for
the United States.That amount will
barely make a dent.Add that to the cost
of getting people to work up there, the cost of putting in a pipeline, and the
cost of repairs every spring when pipelines begin to sink into melting
permafrost, and suddenly drilling in the arctic doesn't seem like the best idea
anymore.

Like the oil in Alaska, what little undiscovered
oil is left will be in the most remote and harshest conditions on the planet
which will make it all the harder and more expensive to drill.Meanwhile unconventional oil, such as the oil
sands, oil shales, and extra heavy oil, are all more work as well. When oil
becomes harder to get it means it becomes more expensive to get and therefore
more expensive for the consumer.Turning
to these sources for oil is often times seen as a sign of having crossed over
the point of Peak Oil and into the decline on the other side.

Peak Oil is predicted to be happening sometime
right about now and there seem to be signs of it popping up around the world,
from rising gas prices to declining oil fields.There are some optimistic estimations that Peak Oil will begin after
2020.Meanwhile the International Energy
Agency says production of conventional crude oil peaked in 2006.So no matter how you look it, we have at best
eight years to go before we hit peak oil.No matter when it happens exactly, life is going to start to change.

Stay tuned here at the Paracord Project for the
next section on Peak Oil.Find out what
is going to happen as oil declines and how will it effect you, andthe world we live in.